The investment giant Credit Suisse recently announced a new ocean health impact fund through a partnership with Rockefeller Asset Management. The new Ocean Engagement Fund has already raised $212 million in pre-launch.
The two investment firms say this fund is unique in being the first fund solely tackling U.N. Sustainable Development Goal (SDG) 14: life below water. The fund is the second at Credit Suisse to tackle a single SDG, with another fund focused on SDG 12: responsible production, which the company launched last year.
The fund’s portfolio will include 30 to 50 businesses, yet to be chosen by the two organizations. The Ocean Foundation, a community foundation focused on ocean conservation, will be advising the fund on which businesses to include in the portfolio.
According to the partnership, the fund’s emphasis will be on companies providing innovative solutions to ocean sustainability. The Ocean Foundation will also share best practices with the fund’s partners to help move businesses and their stakeholders away from harming the ocean and closer toward achieving a net-positive marine habitat impact.
To carry out these goals, this fund’s managers say it will address three key themes: pollution prevention, carbon transition and ocean conservation. Considering the growing traction of the Task Force on Nature-Related Disclosures (TNFD), the guidelines of which seek to move capital to “nature-positive activities,” the fund is certainly timely.
In a statement, Marisa Drew of Credit Suisse spoke of the need for the new fund. Drew observed that considering a third of institutional investors are keen to invest in the Blue Economy, the ocean remains one of the least invested assets covered by the U.N. SDGs. The new fund aligns with commitments by Credit Suisse to provide over $323 billion toward green bonds and a low-carbon economy in the next 10 years. It also comes after the issuance of a $28.6 million bond in partnership with the World Bank last year to finance fresh and saltwater habitats and resources.
The fund’s launch is also prescient in another way, coinciding as it has with last month's U.N. Biodiversity Summit, during which world leaders attempted to finalize a new deal for nature. This new deal would be in the form a global agreement similar to the 2015 Paris Accords. A 20-point plan by the U.N. outlined in January had already acknowledged the need to protect natural habitats to avert a sixth mass extinction.
Further, the current U.N. plan commits to protect 30 percent of terrestrial marine and freshwater habitats. The plan’s authors also warn that a third of the world’s ocean and land must be protected to reverse biodiversity decline.
On that point, a letter from a coalition of 140 nature conservation organizations has been sent this week to U.N. Secretary-General Antonio Guterres. The letter highlights the issues raised by the summit, asserting that $500 billion must be spent annually to fund habitat restoration, creation and protection. Reinforcing this sentiment, the World Economic Forum (WEF) warned in July that over half of global GDP, or $44 trillion, is exposed to risks from nature loss.
Along with Credit Suisse, another organization trying to address the lack of investment in protecting natural marine habitats is The Nature Conservancy (TNC). The environmental nonprofit is currently launching a $40 million suite of ocean conservation bonds with the goal to use the bonds to raise $1.6 billion for marine conservation.
A recent study by the IPCC further underlines the specific importance of oceans as natural capital. It found that the world’s oceans have absorbed 93 percent of the extra heat generated by human activity and 25 percent of human-generated carbon dioxide emissions since 1970. These facts demonstrate the role of oceans in helping address some of the nature-related climate risks the WEF identified.
Nevertheless, the aforementioned biodiversity summit highlights the oceans’ ongoing fragility. Not only are oceans rich stores of biodiversity, but they also act as crucial heat and carbon sinks for the planet. Hence the Credit Suisse Ocean Engagement Fund, and others like it, could hail a new era in which the role of blue assets in managing nature-related climate risks is better understood. A rapid revaluing of blue assets may soon be on the way.
Image credit: Milos Prelevic/Unsplash
James has been writing about investing and sustainable finance and development for over ten years. With a background in sustainability consulting, his book 'Green your business now', was used as the basis for a sustainable business accreditation scheme in the U.K. He also helped PepsiCo with branding and investment strategy for its Tropicana product line as part of its Performance with Purpose agenda. His views on sustainable development and responsible investing have been featured in Morningstar magazine and the UKs Urban Design Journal, an organization that promotes sustainable development. He has an active interest in ESG having written for ESG investor platform Curation, where he helped curate content used in environmental risk briefings for FTSE100 companies. Topics James has covered include governance issues, renewable energy adoption, accessible design, sustainability reporting and climate related financial risk disclosures.